- NGX sanctioned four listed firms for inability to meet the regulatory requirements ranging between the third quarter of 2022 and the full year of 2022.
- PZ Cussons Nigeria Plc led with N8 million of the fines for failure to file the 2022 audited financial statement which represents 41% of the total fines
- The Exchange in its X-Compliance report explained that the initiative was designed to maintain market integrity and protect the investors by providing compliance-related information on all listed companies.
The Nigerian Exchange Limited (NGX) has fined four quoted companies N11.7 million for failure to file their financial statements after the regulatory due date.
Checks by Nairametrics showed that the companies were sanctioned during the year 2022 for their inability to meet the regulatory requirements ranging between the third quarter of 2022 and the full year of 2022.
The companies include Ecobank Transnational Incorporated Plc, Notore Chemical Industries Plc, PZ Cussons Nigeria Plc, and John Holt Plc.
Breakdown of fines
Further checks showed that PZ Cussons Nigeria Plc led with N4.8 million of the fines for failure to file the 2022 audited financial statement which represents 41% of the total fines while Ecobank Transnational Incorporated Plc and John Holt Plc followed with a fine of N3.2 million apiece for inability to file third quarter 2022 unaudited financial and 2022 audited financial statement respectively. Notore Chemical Industries Plc trailed with a fine of N500,0000 for failure to submit the 2022 audited financial statement.
What market operators said
Market operators agreed that the sanction for non-compliance with the rules of listing on NGX is a welcome development, as it will lead to more appropriate pricing of securities. More quoted entities would be compelled to give information to the market on time.
The Managing Director, of Crane Securities Limited, Mr. Mike Eze, while reacting to the development on an inquiry by Nairametrics, said the action of NGX would boost investor confidence in the market because it is sending a signal for the need for investors to get companies’ financial reports as at when due.
He added that investors needed to make informed decisions before choosing which stock to buy and this can only be achieved if there is adherence to good corporate governance by the quoted companies.
According to the founder, of the Independent Shareholders Association of Nigeria (ISAN), Sir. Sunny Nwosu, going by what the exchange said, those involved deserved to be sanctioned. Nwosu noted that the affected companies and persons were supposed to have ensured that they met the requirements as such would help shareholders to understand their financial health for investment decisions.
“It is not a new thing and it does not come to us as a surprise. We have constantly written to the exchange and raised the issue at annual general meetings that there is a need to know the status of these companies to enable us to take investment position,” he noted.
Also, the President, of Progressive Shareholders Association, Mr. Boniface Okezie, said it was better for Nigerians to have a few companies that are ready to play by the rules than to have all the companies in the world that are not ready to satisfy post-listing requirements.
Okezie said that penalizing companies for non-compliance with the rules of listing on NGX was a welcome development, as it will lead to more appropriate securities pricing. He said more entities would be compelled to give information to the market on a timely basis, adding that investor confidence in the regulatory capacity of NGX and the market would be enhanced.
A founding member of Nigeria Shareholders Solidarity Association and one of the leading shareholder activists, Alhaji Gbadebo Olatokunbo said: “We must always abide by the rules, sanctions would make the companies sit up and post their results as and when due, thereby providing investors, analyst, and stockbrokers the platform to predict the real value of the companies”.
What you should know
The Exchange in its X-Compliance report explained that the initiative was designed to maintain market integrity and protect the investors by providing compliance-related information on all listed companies.
- The report thus stated that “Companies that are listed on the Exchange are required to adhere to high disclosure standards which are prescribed in Appendix 111 of the Listing Rules.
- “Financial information which is periodic disclosure and on-going material events disclosure should be released to The Exchange promptly to enable it efficiently perform its function of maintaining an orderly market”.
NGX Group never fails to amuse stakeholders. I have refrained from analysing the reports of NGX Group that was worse than the year before despite the shameful.manipulations contained in the report. I want other Analysts to spot the multitude of issues therein. It’s a pity. The stock market is gradually going into extinction, all because of incompetence. No IPO in more than 5 years. Yet billions of Naira went into ponzi and cryptos.
The Stock Market is not going into extinction. Because, IPOs are not floated doesn’t mean the market is dying. You can trade in any shares of your choice in the secondary market. Companies would have to be encouraged to see the reason why they need to be listed. It is all about enlightenment. I will not want to comment on the NGX group shares, it ought to be making profit because of its monopoly. I can’t put my money in such shares. The result is not commendable.
John, you are missing the point One of the critical indices of market development is the listing of new companies. Trading turnover is struggling at least in the last 25 years. Gone were the days NGX traded an average of N15 daily. Today, the platform is struggling to do N3billion. What does that tells you? We need fresh companies to turn things around for the market. Instead the management of exchange is planning an abracadabra arrangement that would impose extra cost on listed companies in this tough and excruciating business environment.
Let me look into the near future for you. So you understand what the ifeoma is saying. The following companies are likely going to delist from the market sooner than later – Nestle (surprised?) It will soon happen, Unilever, Aso Savings, PZ, Courteville, Global Spectrum, Union Bank, Oando, Ardova, MRS Conoil, Honeywell, Tourist co, infinity trust just to mention a few. Just look at free float numbers and see the continued relevance of public listing. Yet they promised the exchange to dilute but they keep acquiring more and spreading ownership to subsidiaries and associates When the companies goes private, public listing is depleted. We need to macro in our thing